Greggs hands out 20 mln stg special dividend, sees sales rise

LONDON, April 29 (Reuters) - British baker Greggs announced a 20 million pound ($31 million) special dividend on Wednesday and said sales in the first four months of the year had exceeded its expectations.

The company, which sells sausage rolls, sandwiches and pastries from 1,656 retail outlets, said that after a capital structure review it had decided to scrap a proposed share buyback and would instead pay a special dividend of 20 pence per share on July 17, in light of its strong cash position.

Greggs (LSE: GRG.L - news) said that rising consumer disposable incomes together with improvements to its sandwich and breakfast options had helped total sales for the 16 weeks to April 25 rise by 5 percent, with sales at its shops open over a year up 5.9 percent, ahead of its expectations.

The company said it now expected a first half performance ahead of its expectations, although the second half would see the firm come up against stronger sales comparatives and a less certain cost outlook. ($1 = 0.6516 pounds) (Reporting by Neil Maidment, editing by James Davey)